Vice-President of the European Commission and member of the Commission responsible for Economic and Monetary Affairs and the Euro

Press Speaking Points at the Eurogroup Press Conference

Eurogroup Press Conference, Brussels

14 May 2013

Many thanks Jeroen.

I will focus on the last issue you mentioned, which is one very important element of our discussion this evening, namely the construction of a banking union in Europe.

I believe our work on doing this, establishing a banking union will be one of the most crucial tasks at European level over the coming months and years for creating the foundations for growth and jobs. Completing the repair of the financial sector is not about "bailing out bankers". It is about letting credit flow to unleash the investment that is essential for a sustainable recovery and job creation.

We have made significant progress with the work to design the rules for direct bank recapitalisation by the European Stability Mechanism (ESM). We now need to work intensively to conclude an agreement by next month. Of course this adoption of a direct recapitalisation instrument is a decision for the Member States, as the owners of the ESM. The Commission continues to work hard to facilitate an agreement in the coming, final phase of negotiations.

It is very important, in our view, that direct recapitalisation by the ESM – which will be a well-designed bridge to stability – can be agreed in June in parallel with the Council's political agreement on the Bank Recovery and Resolution Directive. I believe we can accelerate the final adoption by the European Parliament as well.

Direct recapitalisation by the ESM will have a crucial role to play in the broader context of banking union and in the specific context of the future move towards a Single Resolution Mechanism. The Commission will bring forward an ambitious proposal for a Single Resolution Mechanism by the summer, as an essential complement to the Single Supervisory Mechanism.

The European Union is often accused of being cumbersome and slow. Now after one year of setting the bold and very substantial political objective of building a banking union, its main elements are being put in place. I don't think that is a mean achievement. The banking union and the issue of financial repair more broadly, were a key topic of discussion at this weekend’s G7 meeting in Buckinghamshire in the UK. I think it's fair to say that, while the US by and large proceeded with financial repair in 2008-9, which was crucial to its recovery, this process in Europe is still only partially achieved, which is working as a critical drag against returning to recovery.

So, moving forward with the banking union is all the more urgent and important, in view of the excessively tight financing conditions prevalent especially in southern Europe. These are hindering the flow of credit to households and businesses. The Commission will continue to work closely with both the ECB and the European Investment Bank to see what more can be done to remove this persistent obstacle to economic recovery in Europe.